Syria Country Office

SYRIA COUNTRY OFFICE

MARKET PRICE WATCH BULLETIN July 2020 ISSUE 68

Picture @ WFP/Hussam Al Saleh @WFP/Jessica Lawson Highlights Standard Food Basket Figure 1: Food basket cost and changes, SYP ○ The national average price of a stand- The national average price of a standard reference 1 ard reference food basket in July 2020 food basket increased by three percent between June and July 2020, reaching SYP 86,571. The highest rate was SYP 86,571 (USD 69 at the official recorded since the start of the crisis. The national av- exchange rate 1,250/USD), increasing by erage food basket price was 131 percent higher than three percent compared to June 2020. that of January 2020 and was 251 percent higher com- The reference food basket price in- pared to July 2019 (Figure 1). creased by 251 percent since July 2019. Compared to June 2020, July food basket prices have ○ The national average ToT between been relatively constant due to the arrival of the coun- wheat flour and daily non-skilled wage try’s main agricultural harvest and the strengthening labour, a proxy indicator for purchasing of the informal exchange rate.

power, reached its lowest level since While seven governorates reported an increasing aver- Chart 1: National min., max. and average food basket cost, SYP monitoring began (2014). In July 2020 a age reference food basket price in July 2020, five gov- daily non-skilled wage could afford only ernorates reported a decreasing average reference 3.91kgs of wheat flour compared to food basket and two governorates reported no change 8.83kgs in July 2019. compared to June 2020. ○ Increased fodder prices caused the The highest month-on-month (m-o-m) increase report- price of meat to increase. M-o-m, ed was in Lattakia (up 20 percent) reaching SYP minced beef increased by ten percent 92,504, followed by Idleb (up 16 percent) reaching SYP reaching SYP 11,399/kg and whole 124,769. Lattakia’s increase is led by higher import cleaned chicken increased by 34 percent costs on trade into Syria, while the increase in Idleb’s reaching SYP 3,144/kg. basket is linked to the continuous decrease in the bread bundle size. ○ The Syrian pound informal exchange Compared to last year, the price of the reference food Map 1: Location of markets monitored by WFP rate strengthened by 11 percent m-o-m basket has increased across all 14 governorates. Idleb in July reaching a monthly average of recorded the highest increase (up 420 percent), fol- SYP 2,262/USD. Both the UN operational lowed by Rural Damascus (up 290 percent). rate and the official exchange rate re- The gap between the highest and lowest average food mained unchanged at SYP 1,250/USD. basket price widened by 56 percent from SYP 31,188 ○ For further information, please con- in June 2020 to SYP 48,661 in July 2020 (Chart 1). The tact: gap has also widened by 740 percent between July Jan Michiels at 2019 and July 2020. Highlighting worsening trade rela- [email protected] tions across Syria as well as being affected by the dif-

Pakinam Moussa at ferent COVID-19 preventive measures imposed by the [email protected] different administrative entities across Syria.

1. The standard food basket is a group of essential food commodities. In Syria, the food basket is set at a group of dry goods providing 1,930 kcal a day for a family of five during a month. The basket 1 includes 37 kg bread, 19 kg rice, 19 kg lentils, 5 kg of sugar, and 7 litres of vegetable oil

Syria’s economic situation Overview Since October 2019, food and non-food items’ prices have been increasing in Syria because of the Lebanese financial crisis and its impact on the informal exchange rate in Syria. The outbreak of Covid-19 in March 2020 and its related government preventive measures added to the already worsening economic situation and caused prices to increase even further since March 2020. In June 2020, the economy aggravated as a result of the political tensions and the uncertainty accompanied by the intensification of unilateral coercive measures (such as sanctions). There was high volatility in the informal exchange rate, and the average monthly rate jumped from SYP 1,600/USD in May 2020 to SYP 2,505/USD in June 2020, causing wholesalers to reduce their food supply on Syrian markets and caused some retailers to momentarily close their shops, while prices of all commodities (food and non-food items) have increased, especially of imported items.

Table 1: Informal market exchange rate, 1 USD to SYP Informal exchange rate % change % change Governorate July 2020 When measuring exchange rates, there are two quotations. The first is the (m-o-m) (y-o-y) direct quotation where the US dollar is the base of measuring the change in Aleppo 2,263 9% -74% exchange rate against the local currency. The second one is the indirect quo- Al-Hasakeh 2,301 3% -74% tation where the local currency is the base of measuring the change in the Ar-Raqqa 2,295 Bakery in Aleppo4% @ Hussam- 74%Al Saleh exchange rate against the US dollar. The change in the exchange rate used As-Sweida 2,243 12% -73% below reflects the indirect quotation (measuring how much the Syrian pound improved (appreciated) or worsened (depreciated) against the US dollar). Damascus 2,264 12% -74% Dar'a 2,243 11% -74% In July 2020, the Syrian pound appreciated by 11 percent in the informal ex- Deir-ez-Zor 2,334 18% -74% change rate market and reached SYP 2,262/USD. Compared to a year ago, the Syrian pound though has significantly depreciated by 74 percent. On the oth- Hama 2,226 13% -73% er hand, the operational UN rate and the official exchange rate have both Homs 2,225 14% -73% remained unchanged at SYP 1,250/USD compared to June 2020. However, Idleb 2,314 11% -74% both rates have lost 65 percent of their value since July 2019. Lattakia 2,234 12% -73% The highest informal exchange rate was reported in Deir-ez-Zor at SYP 2,334/ Quneitra 2,223 11% -73% USD (appreciated by 18 percent m-o-m; and depreciated by 74 percent y-o- Rural Damascus 2,267 11% -74% y), followed by Idleb at SYP 2,314/USD (appreciated by eleven percent m-o- Tartous 2,234 11% -73% m; and depreciated 74 percent y-o-y). Conversely, the lowest rates were National average 2,262 11% -74% reported in Quneitra at SYP 2,223/USD (appreciated by 11 percent m-o-m; Official rate 1,250 0% -65% and depreciated by 73 percent y-o-y), followed by Homs at SYP 2,225/USD UN operational rate 1,250 0% -65% (appreciated 14 percent m-o-m; and depreciated by 73 percent y-o-y).

Key food-items Between July 2020 and June 2020, the price of main food-items increased despite the improvement in the informal exchange rate. Wheat flour increased by nine percent reaching SYP 1,028/kg, bulgur increased by ten percent reaching SYP 1,252/kg, Egyptian white rice increased by ten percent reaching SYP 1,565/ kg and red split lentils increased by six percent reaching SYP 1,335/kg. The increase in prices is also related to the Eid Al Adha (31 July-2 August) festive period, leading to increased demand for most food-items. On the other hand, vegetable oil remained unchanged at SYP 2,914/litre, while sugar price decreased by five percent reaching SYP 1,264/kg.

Additionally, the price of meat products have all increased as a result of fodder price increases by end of June. Fodder is mostly composed of soybean and corn which are both imported. M-o-m, the price of minced beef increased by ten percent reaching SYP 11,399/kg and whole cleaned chicken increased by 34 percent reaching SYP 3,144/kg. The price of fresh eggs have also increased by 18 percent, reaching SYP 2,825/carton of 30 eggs, and cheese increased by 24 percent, reaching SYP 3,176/kg. Chart 2: Month-on-month price evolution of main food-items, SYP Chart 3: Month-on-month price evolution of meat-related products, SYP

Source: WFP Field Offices 2

Legend on regions of analysis: ‘Northwest’=Aleppo; ‘Cross-border’=Idleb & Chart 4: Retail Prices of Wheat Flour, SYP Aleppo [A’zaz, Atarib & Afrin]; ‘Coastal’=Lattakia & Tartous; ‘Northeast’=Ar- Raqqa, Al-Hasakeh & Deir-ez-Zor; ‘Middle’=Damascus, Rural Damascus, Ha- ma & Homs; ‘South’=Dar’a, As-Sweida & Quneitra. Staple cereals retail prices Wheat Flour In July 2020, the national average retail price of wheat flour throughout Syria increased by nine percent m-o-m and by 275 percent y-o-y, reaching SYP 1,028/ kg. The highest recorded wheat flour price was in Al-Hasakeh (up six percent m-o- m) reaching SYP 1,292/kg, followed by Dar’a (up 15 percent m-o-m) reaching SYP 1,176/kg - Chart 4. The lowest average wheat flour price was recorded in Ar- Raqqa at SYP 921/kg (up one percent m-o-m), followed by Rural Damascus at SYP 926/kg (up three percent m-o-m). Chart 5: Retail Prices of Rice, SYP Broken down by regions, the southern region reported the highest retail price at SYP 1,152/kg (up 12 percent m-o-m), followed by the coastal region at SYP 1,060/ kg (up 23 percent m-o-m), while the cross-border region reported the lowest retail price at SYP 964/kg (up 21 percent m-o-m), followed by northwest Syria at SYP 966/kg (up nine percent m-o-m).

Rice The national average retail price of Egyptian white rice increased by ten percent since June 2020 and by 293 percent since July 2019, reaching SYP 1,565/kg in July 2020. The highest m-o-m price was reported in Rural Damascus at SYP 1,883/kg (up 14 percent m-o-m), followed by Quneitra at SYP 1,815/kg (up two percent m- o-m). The lowest price was reported in Hama at SYP 1,350/kg (up 16 percent m-o- m), followed by Homs at SYP 1,351/kg (up 15 percent m-o-m).

M-o-m, the southern region reported the highest price at SYP 1,713/kg (up six percent), followed by northeast Syria at SYP 1,632/kg (up five percent), while Chart 6: Retail Prices of Bulgur, SYP northwest Syria reported the lowest price at SYP 1,419/kg (up ten percent), followed by the cross-border region at SYP 1,474/kg (up ten percent m-o-m) - Chart 5.

Bulgur The national average retail price of bulgur was SYP 1,252/kg representing an increase of ten percent m-o-m and of 288 percent y-o-y. Tartous reported the highest bulgur retail price at SYP 1,380/kg (up 19 percent m-o-m), followed by Homs at SYP 1,375/kg (up 19 percent m-o-m). The lowest bulgur retail prices were reported in Deir-ez-Zor at SYP 847/kg (down 20 percent m-o-m) and Idleb at SYP 1,093/kg (up 19 percent m-o-m).

The middle region reported the highest average bulgur price by region at SYP 1,357/kg (up 15 percent m-o-m), followed by the coastal region at SYP 1,340/kg Chart 7: Retail Prices of Commercial Bread, SYP (up 21 percent m-o-m). The cross-border region reported the lowest average bulgur price at SYP 1,075/kg (up 11 percent m-o-m), followed by northeast Syria at SYP 1,133/kg (down seven percent m-o-m) - Chart 6.

Bread prices* In July 2020, the national average price of subsidized bread was SYP 58/bundle (down three percent m-o-m). Northeast Syria reported the highest price at SYP 73/bundle (down seven percent m-o-m), while northwest Syria reported the lowest price at SYP 50/bundle (down one percent m-o-m).

On the other hand, commercial bread price increased by ten percent m-o-m reaching SYP 291/bundle. The cross-border region reported the highest price at SYP 1,487/bundle due to the continuous decrease in the bread bundle size (up 17 percent m-o-m). Source: WFP Field Offices 3 *WFP-monitored commercial bread includes resold public bread bundles. In Idleb and some of Aleppo cities where bread is not subsidized, the commercial bread WFP monitors only covers bread sold by retailers in shops.

Diesel and butane gas prices Chart 8: Formal and informal diesel Prices, SYP*

In July 2020, the informal national average price of diesel increased by one percent since June 2020 reaching SYP 475/litre. Moreover, the informal price remains higher than the formal price (SYP 174/litre) by 173 percent (Chart 8). Idleb continued to report the highest informal price at SYP 1,189/litre (down eight percent m-o-m), followed by Aleppo at SYP 836/ refill (down 0.2 percent m-o-m). The lowest average informal price was reported in Al-Hasakeh at SYP 150/litre (unchanged m-o-m), followed by Ar -Raqqa at SYP 244/litre (up one percent m-o-m).

Broken down by regions, the highest average informal diesel price was recorded in the cross-border region at SYP 1,166/litre (down eight percent m-o-m), followed by northwest Syria at SYP 587/litre (up 11 percent m-o- m). The lowest average informal diesel price was recorded in northeast Chart 9: Formal and Informal butane gas prices, SYP* Syria at SYP 227/litre (down three percent m-o-m), followed by the coastal region at SYP 385/litre (up four percent m-o-m).

The informal national average price of one butane gas cylinder (25,000 lt) decreased by six percent m-o-m, reaching SYP 13,197/refill in July 2020. The informal price of a butane gas cylinder is still higher than the formal price of SYP 2,746/refill by 381 percent (Chart 9).

Quneitra reported the highest informal refill price at SYP 19,108/refill (down eight percent m-o-m), followed by Dar’a at SYP 18,744/refill (down one percent m-o-m). While, Al-Hasakeh reported the lowest informal refill price at SYP 5,433/refill (down 16 percent m-o-m), followed by Idleb at SYP 6,708/refill (down one percent m-o-m).

Broken down by regions, the southern region reported the highest informal refill price at SYP 18,714/refill (down three percent m-o-m), followed by the cross-border region at SYP 17,124/refill (down four percent m-o-m). On the other hand, northeast Syria reported the lowest informal refill price at SYP 7,648/refill (down five percent m-o-m), followed by northwest Syria at SYP 9,433/refill (down 15 percent m-o-m).

COVID-19 NFIs Table 2: COVID-19 items prices, SYP % Change WFP started collecting COVID-19 related non-food items since Commodity February avg. July avg. (Feb; July) March 2020. Between June and July 2020, the prices of plastic Surgeon mask 79 369 367% gloves, alcohol spray, bleach bottle and hand gel all increased by Gloves (pair) 67 273 307% 19, 11, 12 and 17 percent, respectively. On the other hand the 418 1,385 231% price of surgeon masks decreased by four percent, while soap Alcohol spray (200 ml) price remained unchanged. Additionally, Table 2 highlights the Bleach bottle (L) 416 1,115 168% significant price increase in July compared to February 2020 (pre Hand gel (50 ml) 241 902 274% COVID-19 period). Furthermore, compared to February 2020, the Soap bar 149 388 160% price of all COVID-19 related items have skyrocketed in July 2020. Surgeon masks recorded the highest increase of 367 percent, while soap recorded the lowest increase of 160 percent. Table 3: COVID-19 items prices week-on-week during July 2020, SYP Between the first and last weeks of % Change July, plastic gloves recorded the Commodity Week 1 Week 2 Week 3 Week 4 Week 5 (Weeks 1 & 5) highest increase of 15 percent, followed by alcohol spray which in- Surgeon mask 359 356 370 381 378 5% creased by 10 percent, while hand Gloves (pair) 249 257 277 294 287 15% gel recorded the lowest increase, at Alcohol spray (200 ml) 1,289 1,368 1,407 1,444 1,415 10% four percent. Bleach and soap pric- Bleach bottle (L) 1,119 1,136 1,125 1,112 1,082 -3% es fell by three and six percent re- Hand gel (50 ml) 883 895 901 919 914 4% spectively between July week 1 and Soap bar 395 395 398 381 371 -6% week 5. Source: WFP 4

* No formal prices have been reported in the cross-border region because there is neither subsidized diesel nor subsidized butane cylinders in the region.

3 Terms of Trade (ToT) Chart 10: Daily wage for unskilled labour, SYP ToT between wage labour and wheat flour The national average non-skilled labour wage, which represents construction, off-loading and agricultural labour, was SYP 4,022/day in July 2020 (up nine percent m-o-m). The wage rate was 66 percent above its y-o-y level and 51 percent above levels recorded in January 2020 (Chart 10). Out of all regions, the cross-border region reported the highest monthly average daily wage in July at SYP 5,956/day (down two percent m-o-m), followed by the coastal region at SYP 5,650/day (up 31 percent m-o-m). This increase is linked to the general increase in food and non-food items’ prices causing labourers to demand higher daily wage rates.

The national average ToT between wheat flour and wage labour, a proxy indicator for purchasing power, decreased by one percent. Compared to both January Chart 11: Terms of Trade (ToT) between wheat flour and wage labour 2020 and July 2019, the national average ToT between wheat flour and wage labour also decreased by 42 and 56 percent respectively, highlighting a significant worsening purchasing power trend. The national average daily wage of a non-skilled labourer could buy 3.91 kgs of wheat flour in July 2020 compared to 3.94 kgs in June 2020, 6.74 kgs in January 2020 and 8.83 kgs in July 2019. Mark- ing the lowest level since ToT monitoring started (October, 2014).

ToT between sheep and wheat flour The national average price of a two-year old alive male sheep increased to SYP 370,715/sheep in July 2020, up six percent m-o-m (Chart 12) as a result of increased fodder prices. Idleb reported the highest average price across Syria at SYP 490,933/sheep (up 12 percent m-o-m). Ar-Raqqa reported the lowest aver- Chart 12: Price of livestock, SYP/one 2Y old sheep age price for an alive two-year old male sheep at SYP 308,556/sheep (up seven percent m-o-m). In July 2020, the ToT between an alive two-year old male sheep and wheat flour was 361 kg/sheep (down three percent m-o-m). Highlighting a worsening in the exchange for livestock owners who could buy on average three percent less kgs of wheat compared to a month earlier.

Broken down by regions, the cross-border region reported the highest ToT at 518 kg/sheep (down five percent m-o-m). While, the southern region reported the lowest ToT at 292 kg/sheep (down three percent m-o-m), highlighting a de- terioration in livestock owners’ purchasing power. Vegetable prices Chart 13: Terms of Trade (ToT) between wheat flour and the price of a 2 year old sheep As a result of a decent harvest season, most vegetables’ prices have decreased in July 2020. M-o-m, the price of onions decreased by eleven percent reaching SYP 340/kg. The cross-border region reported the lowest price at SYP 200/kg (down 16 percent m-o-m), while the coastal region reported the highest price at SYP 415/kg (down 30 percent m-o-m). Nevertheless, the price of vegetables remains 100 to 200 percent above levels recorded 12 months ago.

The price of potatoes also decreased by 12 percent reaching SYP 337/kg. North- west Syria reported the lowest price at SYP 254/kg (down ten percent m-o-m), while northeast Syria reported the highest price at SYP 412/kg (down 17 percent m-o-m).

On the other hand, the price of carrots has been increasing due to seasonality. M-o-m, the price increased by seven percent reaching SYP 420/kg. Northeast Syria reported the highest price at SYP 610/kg (down two percent), while northwest Syria reported the lowest price at SYP 308/kg Source: WFP

(up 14 percent m-o-m). 6. The ToT are proxy indicators of the purchasing power of households that rely on livestock and/or casual labour as their main source of income for the purchase of cereals from local markets. 5 ToT are important components of food security analysis. Changes in the terms of trade between wages/livestock and staple food commodities are indicative of the trends in purchasing power and the impact on the food security situation of households dependent on food purchases through income from daily wage labour and/or the sale of livestock.